Global Market Dips Will Be Bought Into, Says Citigroup’s Mohammed Apabhai

As geopolitical tensions escalate, Mohammed Apabhai, Citigroup global markets head of Asia Trading Strategy, said any dip in the global equity market will be used as buying opportunities by investors.

“Any pullback you will see in the first couple of months will be aggressively bought into,” he told Bloomberg News in an interview.

Escalating geopolitical tensions have given rise to expectations of an equity correction. The situation between the U.S. and Iran tensed over the last 24 hours as Tehran said it would no longer abide by any limits on its enrichment of uranium following the killing of General Qassem Soleimani. Also, President Donald Trump said he was prepared to strike Iran “in a disproportionate manner” if it retaliates against any U.S. target. Iraq’s Parliament, too, voted for the removal of U.S. troops from its soil.

That led to a decline in equity markets in Japan, South Korea and Hong Kong, while futures in the U.S. and Europe retreated this morning. Gold rose to its highest since 2013 and oil hit the $70-mark.

Here are the other key highlights from the conversation with Mohammed Apabhai:

• More upside for gold, to do with the risk in Middle East.
• Dollar would be weaker in the first half of 2020, sets up nicely for gold.
• Developments are positive for gold, especially geopolitical tensions.
• “As long as there isn’t a significant escalation, we should be okay”. If there is a significant escalation, “Asia will fall into the pattern we have seen before”.
• The moving pieces include trade deal, Donald Trump’s impeachment hearing and U.S.-Iran tensions.

Watch | Citigroup’s Mohammed Apabhai on the global equity market, gold prices and more...